From EurActiv, July 17:
The carbon pricing overhaul means factories and coal power plants could continue business as usual into the 2040s
The European Commission will today present a reform of its flagship industrial carbon pricing scheme, the first of many overhauls of climate and energy laws as the EU moves further from the Green Deal of the early 2020s towards more pro-industry and electrification policies.
The bloc’s most effective climate policy over two decades has been the carbon price on industrial emissions – the Emissions Trading System (ETS) – under which factory and power plant operators currently pay around €80 for every tonne of CO2, or equivalent, they emit.
Since 2005, emissions in the sectors covered have roughly halved, reducing annual greenhouse gas emissions by the equivalent of about a billion tonnes – with the electricity industry contributing most through the shift from coal to cleaner gas and renewable wind and solar power.
But heavy industry is feeling the pinch as the generous free allocation of emissions allowances they have enjoyed since the 2010s dries up.
Moreover, a recent increase in the rate at which the overall supply is reduced each year – by 80 million tonnes, or roughly the total greenhouse gas output of Austria – means that no more will be issued after 2039.
For boardrooms across Europe, the deadline for reaching net-zero is looming dangerously close.
Backpedalling
The EU executive has been under tremendous pressure from industrial lobbyists and half of the EU to throw their companies a lifeline.Now, according to sources involved in the negotiations, the Commission is poised to present sweeping changes to the scheme: delaying the end-date by reducing the annual lowering of what amounts to an emissions cap, and prolonging the supply of free pollution permits.
Peter Liese is the centre-right MEP who led the last reform of the ETS regulation and has already been named lead negotiator on today’s proposal. “Zero emissions in 2039 are absolutely unrealistic for steel and cement plants, the chemical industry – and especially for aviation,” Liese said on Thursday....
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